CVG Fights Headwinds to Improve Net Income, Revenue
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CVG, whose business segments include commercial vehicle seating and electrical systems, reported increased net income and revenue for the third quarter as it continued to diversify its customer base.
Net income for the period ended Sept. 30 was $7.51 million, or 23 cents per diluted share, compared with $4.17 million, 13 cents, in the 2020 period.
Revenue at the New Albany, Ohio-based company rose to $239.6 million compared with $187.7 million a year earlier.
Bevis
“The types of new business we are winning includes components, sub-assemblies and systems for electric delivery vans, electric and fuel cell trucks, electric buses, electric battery systems, ATVs, side-by-side power sport equipment, farm equipment and automated material handling systems,” said company CEO Harold Bevis.
The quarter also reflected $1.3 million on startup expenses, as new business continues to exceed expectations, CVG noted.
Revenue in its electrical systems segment rose to $164.1 million compared with $121.1 million a year earlier — lifted by the increased North American truck build and more warehouse automation products sales.
The increased sales brought operating income to $17.8 million compared with $12.2 million a year earlier.
Its global seating segment saw revenue increase to $76.5 million compared with $68.9 million in the 2020 period as CVG increased pricing to mitigate the inflation in materials, as well as saw strong demand in the European construction market.
Operating income in the segment dropped to $400,000 compared with $4.8 million a year earlier. The company cited “challenges in passing along material and freight cost increases to our customers. Additionally, volatile customer schedules, supply chain constraints and freight cost inflation have caused inefficiencies in our operations.”
Looking ahead, CVG reported it expected to be favorably involved in the electric and fuel cell market, as it continues efforts to partner with those manufacturers. CVG noted it had a “full product basket” of offerings, including entire electrical systems for the chassis and powertrain, seating solutions, headliners, interior trim, mirrors, wipers, floor mats and road sensors.
Demand for warehouse automation products is expected to grow about 14% annually through 2026, it said, citing an industry report.
CVG said industry reports show 2021 North American Class 8 truck production levels are expected to be at 263,000 units and Classes 5-7 production at 232,000 units. It said this outlook supports demand for the company’s vehicle products. A year earlier, build levels, respectively were, 214,250 and 223,721.
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